The carbon tax will be repealed within days after a breakthrough in talks between the government and crossbench senators who were concerned at what they believed were draconian provisions in the repeal bill.

An amended bill will be presented to the Senate and the House of Representatives as soon as Monday.

LDP Senator David Leyonhjelm. Photo: Alex Ellinghausen

Liberal Democrat senator David Leyonhjelm and Family First senator Bob Day told the government on Friday they were prepared to walk away from the bill if it continued to include provisions that penalised small businesses that didn't pass on any savings.

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"No one wanted the carbon tax gone more than I did," Senator Day said. "But we couldn't have had those provisions in there. They would have been worse than the tax."

Describing the penalties as "way over the top" and "just draconian" Senator Day said Environment Minister Greg Hunt agreed to remove them on Saturday.

Family First Senator Bob Day. Photo: Alex Ellinghausen

"He sent the amendments through and they are fine,'' he said. "The penalties will now only apply to the 60 or so major energy suppliers. They are big enough and ugly enough to look after themselves."

On Monday, Senator Leyonhjelm warned the government not to cave into Palmer United Party leader Clive Palmer if his party wanted more last-minute amendments, saying Mr Palmer should wear the political consequences of blocking the repeal.

‘‘What I do have concerns about is whether Mr Palmer is acting in the best interests of ... Australia,’’ he told ABC radio.

Mr Hunt said he had had "electronic engagement" with the crossbenchers over the weekend and had offered "some minor edits" to ensure any unintended consequences for businesses were removed.

"I know from my discussions with the Palmer team that they don't want to put impositions on small business," he told Fairfax radio.

"I expect that by the end of the week it will done and dusted and everybody will have lower electricity bills from Friday onwards."

A source close to Clive Palmer said although the amendments looked fine it would be up to Mr Palmer himself to approve them. He is holidaying in New Zealand. Independent senator Nick Xenophon said he would read them carefully before deciding how to vote.

The legislation is backdated to July 1, meaning some customers will get partial refunds on their electricity bills.

But they are unlikely to save anything like the $550 claimed by Prime Minister Tony Abbott at the Queensland Liberal National Party convention at the weekend.

"It's adding 9 per cent to your power bills, it's a $9 billion handbrake on our economy and it's costing average Australian families $550 a year," Mr Abbott said, referring to the carbon tax. "So it must go."

The $550 figure comes from Treasury modelling ahead of the introduction of the tax in 2012. But only $250 of it came from electricity and gas prices. The rest came from much smaller imposts on items such as food ($46), clothing ($29) and rent ($23). Many of the items modelled by the Treasury had price impacts described as "less than 10 cents per week".

The latest iteration of the legislation will include no penalties for businesses who don't pass their energy savings on, making a one-off saving of $250 per household more likely.

"I think that's an overestimate,” Climate Institute chief executive John Connor said on Sunday. "Gas prices are climbing sharply for reasons unconnected with the carbon tax, so it's unlikely there will be any cut in the gas price."

Australia's largest supermarket chain, Woolworths, has said that because it avoided price rises when the carbon tax was introduced there would be little room to remove them when it came off.

Coles says it is "working with suppliers to understand the implications of the change and if we identify any savings attributable to the tax changes we will pass them back to our customers".

Qantas has removed the carbon surcharge on domestic flights but says market conditions do not allow it to reduce its standard fares.

Senator Cormann maintained that households would be $550 a year better off after the tax was repealed despite the Treasury modelling, saying that electricity costs flow through the whole economy and savings from scrapping the carbon tax would reach consumers.

Mr Connor said there should be a review, before repeal, of the real price impacts and benefits. It should be conducted by the independent Climate Change Authority chaired by the former head of Reserve Bank Bernie Fraser.

A bill to abolish the Climate Change Authority also comes up for debate on Monday along with an amendment from Palmer United senators that would enable it to recommend a move to an emissions trading scheme when enough other countries came on board.

251 comments

Is today the day we’ll be able to pop the champagne and celebrate the end of the most useless, unnecessary and divisive tax we’ve seen in years ?

Based on today’s Newspoll, where the majority of Australian simply want the carbon tax gone, there might be a few bottles of bubbly sitting on ice around the country.

Commenter

Hacka

Location

Canberra

Date and time

July 14, 2014, 4:53AM

Labor 54%Coalition 46%

Its over for Abbott , people have stopped listening to pro coalition media propaganda

Commenter

Frank

Date and time

July 14, 2014, 5:45AM

Hacka, Celebrating, yes, especially those of us who work in Australia's declining Secondary Industries. We will be celebrating because a reduction of 10% of power prices will make our Industry more competitive. It will help keep jobs in for those Australians with lower education, or skills.

Commenter

Kingstondude

Location

Melbourne

Date and time

July 14, 2014, 5:48AM

In early with the falsehoods again, eh Hacka? Bask in your moment of bliss, because when people see that they've been lied to again by the LNP (when the promised windfall "savings" from axing the carbon price DON'T eventuate) we will have a real government back in power (and that won't be much longer, especially if Winky has the guts for a DD). I just hope all the damage your mob is doing can be undone - certainly our standing as a laughing stock worldwide because of the antics of Abbott and his team of buffoons will take longer to overcome.

Commenter

BC

Date and time

July 14, 2014, 5:49AM

Hacka, unfortunately they will be disappointed if they believe the removal of the carbon price will actually save them enough to afford a bottle of bubbly. Maybe they bought at Aldi?

Commenter

jofek

Date and time

July 14, 2014, 5:50AM

LOL Hacka....why do you want it gone so bad? What...to save $80 per year? Very sad you are hanging on to saving just $1.53 per week.....you must be very poor to be so desperate. Oh but wait......you will be losing $3000 per year from the very same govt's budget.....seems your logic has become a sad case of dementia.

Commenter

JT

Date and time

July 14, 2014, 5:53AM

Oh yes its wonderful to have a climate change denialist in charge (sort of). If you have a poll about any tax nobody of course wants it. I am glad if it is divisive Hacka; that is if I am divided from you on any issue whatsoever mate. Your comment is repulsive to me anyway. Popping champagne bottles over a backward step. Indeed.

Commenter

Tiny Montgomery

Date and time

July 14, 2014, 5:55AM

Based on today's Newspoll also...Abbott's approval rating is minus 31.....ha ha......LOL......based on that people will be cheering in the streets if the carbon tax doesn't go and Abbott has lost face with Gina and BHP.....LOL

Commenter

JT

Date and time

July 14, 2014, 5:55AM

@Hacka you are just hysterical.The majority of Australians, sadly, swallowed the lies about the ‘carbon tax’ hook, line and sinker thanks to Abbott’s cheer squad of shock-jocks and News Ltds vile campaign of mistruths. We saw the truth behind News Ltds ‘opinions’ yesterday when King Rupert declared the whole climate change thing “rubbish” said “we can’t mitigate” what’s happening and his solution was to “stop building vast houses on seashores.”The cost to deploy an Emissions Trading Scheme right now is negligible.When we are forced to implement one in a few years time it will be a massive hit. But then that will be a nice landmine laid by the LNP for the next in office won’t it? Then they’ll be able to sit on the benches in opposition and snipe saying ‘see, you let them back in office and the first thing they do is introduce a big, bad tax…’

Commenter

Rex

Location

Turramurra

Date and time

July 14, 2014, 6:02AM

The useless carbon tax that saw a fall in CO2 emissions from electricity generation. As each decade is warmer than the previous decade......as sea levels continue to rise......as CO2 levels pass beyond 400 ppm....surely an attempt to lower our carbon emissions is both good politics and good science. The division was from the climate deniers who screamed that the carbon tax would see life on earth come to a halt under the supposed wrecking ball through the economy.The carbon tax had a one off impact on the CPI of less than 0.7%. It was an attempt to use a price signal to lower carbon emissions. Price signals, like a medical co payment, are fine but price signals on carbon emissions are not?Once the carbon tax is gone, what environmental policies will the coalition have? We will be in a minority of one in terms of removing a working carbon tax/ETS. History will not be kind to the coalition. Our environment will now be one where carbon emissions will be seen as less of a worry. Welcome to the age of entitlement for the fossil fuel industry.

13 Jul
Opposition Leader Bill Shorten has refused to confirm whether Labor will support Clive Palmer’s amendments, saying the changes are ‘‘not clear’’ and his party will wait to see the final details before making a decision.

14 Jul
Clive Palmer may be busy shaping the laws of the nation, but when it comes to obeying them, his flagship company is sadly lacking. An analysis of the accounts for Mineralogy Pty Ltd has identified a slew of irregularities. Some are technical, and are laid out in detail below.

10 Jul
Protection for business and a last minute push to toughen penalties for companies who do not pass on savings from axing the carbon tax were central to an extraordinarily day in Canberra that saw the Abbott government’s repeal plans once again frustrated.

10 Jul
The Abbott government has suffered yet another blow to its beleaguered budget after being forced to retain tax cut compensation due to start next year, as well as the Australian Renewable Energy Agency.

8 Jul
The Abbott government's plan to bring on a vote to scrap the carbon tax was delayed on Monday after a day of chaos in the Senate that saw Palmer United Party senators side with the Opposition and Greens to block its first attempt.